WIP-32 Introducing a new pool: Fixed Pool (FOR)

New Markets
1

Hi guys, it’s me again.
As my previous proposal was rejected, I revised my “Bond Pool” proposal, and here’s the new one:

Background and content:

In order to expand Wing’s business scope, the community proposed to introduce a new product pool on the Ontology version of Wing called Fixed Pool.

The Fixed Pool is a decentralized fixed-rate lending pool where lenders can customize over-collateralized fixed-rate debts by setting the total face value, interest rate, collateral, and debt assets accepted. This pool can help borrowers hedge liquidation risks and diversify the DeFi lending market demand. Through this new product, Wing Finance can reach a higher TVL and a larger market value for WING.

Background:

Since the prices of most fungible tokens are easily calculated from exchanges and oracles, most DeFi lending protocols accept them as collateral. However, NFT assets, security tokens, derivative tokens, and LP Tokens are attractive opportunities to collateralize as well. Therefore, it is necessary to have a lending platform where the borrower and the lender reach a consensus on the value of the asset. The Fixed Pool aims to establish an on-chain lending pool where any asset can be collateralized.

Fixed Pool Mechanism

Debt issuance

No permission is required to issue debt. Anyone can lend assets to earn fixed interest rates.
The debt issuance is carried out in four steps:
( 1) Asset is escrowed as collateral
( 2) Debt token gets minted
( 3) Debt token is sold
( 4) Issuance completed

Asset collateralization

The issuer must escrow the assets as collateral before issuing. The collateral can be returned at any time before the debt tokens are minted.

The assets that can be used as collateral are:

  • Fungible OEP-4 tokens
  • Non-fungible OEP-5 tokens
  • Partially-fungible OEP-8 tokens

Debt token minting

  • After the debt issuer has pledged their assets, the debt will begin to be minted in the form of a token.
  • The debt issuer must select the type of debt to be issued, debt maturity, debt asset type, annualized interest rate, debt token price, number of payment periods, fundraising deadline, effective date, and redemption deadline.
  • Debt types are divided into mandatory redemption and negotiable redemption.

Debt trading

The debt issuer can choose to sell the debt tokens in the Fixed Pool or transfer the minted debt tokens on their own.

Issuance

(1)Successful issuance

  • When all the debt tokens have been claimed, and the lent tokens are claimable by the debt issuer.

(2)Failed issuance

  • If a batch of debt is not fully sold, or the ratio of debt collateral value to borrowing value falls below the minimum collateral rate, any user can initiate a refund and liquidation during this period of time. Refund liquidation means that both the issuer and the purchaser can withdraw the tokens they locked.

Purchase

  • The user purchases the debt tokens at their face value on the exchange. The token is shared by the debt issuer and the purchaser, while not being able to be destroyed.
  • After the purchase is completed, the assets used to make the purchase are lent to the debt issuer and the purchaser can transfer the debt tokens to anyone for sale on the exchange.

Interest payment

  • After the debt issuer has paid all the principal and interest, the issuer can withdraw the collateral.

Debtholders’ exercise of negotiable redeemable debts

For negotiable redeemable debts, debt token holders can burn the debt tokens to obtain collateral during the holder’s exercise period.

Redemption

  • After the end of the debt interest calculation, debt issuers can withdraw their collaterals after repaying interests and principal.
  • After the end of the debt interest period, debt token holders can burn debt tokens and withdraw their principal and interest.

Settlement of interest on debt transfer

  • Interests which are not claimed will be automatically sent to the original debt token holder if the debt token ownership changes.

Liquidation

  • There are two cases that result in defaults: a failure to pay interest on time and a failure to redeem collateral on time.
  • For indivisible assets (OEP-5 and OEP-8 assets), after the issuer defaults, debt token holders can initiate liquidation and conduct Dutch auctions.
  • For fungible assets (OEP-4 assets), after the issuer defaults, any debt token holder can trigger liquidation.
  • OEP-4, OEP-5, and OEP-8 assets cannot be liquidated at the same time.

Disclaimer

  1. This is only a very early beta version trial. Developers should think about how to protect users’ assets. Users should use this beta POC product at their own risks
2 Likes
2

The main reasons of my change are:

  1. To avoid calling it “Bond Pool”, since it will involve higher compliance risks
  2. To adjust some of the features I mentioned earlier

Hope it can pass voting this time

3

Fantastic! I didn’t comment on the previous Bond Pool proposal because of the legal concern. But now it seems like a good try in DeFi space. I will vote YES this time. And the current design also works for NFT lending & borrowing as well. Looking forward to its launch soon!

1 Like
4

More clear and understandable

5

Looks good you have my support.

6

I like this proposal, u got my vote:)

7

Yeah there were some concerns about Bond Pool and am glad that we are addressing. Also there needed to be some simplification to the minting and redemption process to make the pool easy to understand and use.

The real selling point and mission of the Fixed Pool is to collateralize anything - real world assets, NFT’s, fungible assets with low liquidity, etc.

So I suggest the name Any Pool to encompass the vision and potential for this pool.

1 Like
8

I raise my hands in favor!

Especially looking forward to it!

Any candidates?

1 Like
9

How to distribute WING incentives for Fixed Pool?

As a beta version, I suggest a trial run in the first phase and release 6 WINGs to the Fixed Pool every day, so the total incentive is 180 WING. It will be divided equally between the debt issuer and purchaser, and distributed to each purchaser in proportion to the capital contribution. The released incentives will not compete with other pools for the time being, and will come from the unallocated WING generated during the Wing Creation Mining Multiplication Event due to rate adjustments.

10

Since this is an attempt, I suggest that we should not go online in the secondary market at the beginning, because it is too complicated.

11

For candidates, OST-1 is a nice option, as someone mentioned in the previous proposal.

For more details, please check here:

12

How can Wing project earn profit from the pool?

13

In the future, there will be several possible revenue entries:

  1. Debt issuance fees, could be proportional to the debt amount.
  2. Asset liquidation fees
  3. After Fixed Pool, we can consider building a dex to trade fTokens (NFT tokens representing debt ownership)

Part of these revenues could be used to buy back and burn WING.

14

Good idea. Anything can be collateralized into that pool

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